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Focus: HEALTH CARE

Rate hike seen likely for many

BLUE CROSS CFO Mike Hudson would like to see health care cost-containment efforts contained in the Affordable Care Act bear fruit soon, because despite efforts to date to rein in ever-growing medical care charges, all of the state's health insurers are asking for significant premium increases for the coming year.

COURTESY BLUE CROSS & BLUE SHIELD OF RHODE ISLAND

Posted:
Saturday, May 18, 2013 12:05 am

By Patrick Anderson PBN Staff Writer

Despite efforts from government and industry to reduce health care spending, Rhode Island health insurers say the cost curve is bending in the wrong direction.

In their annual spring rate requests to state regulators for the coming year, two of the state’s three primary insurers – Blue Cross & Blue Shield of Rhode Island and Tufts Health Plan – asked for the largest increases in average rates in the past four years.

The third, UnitedHealthcare of New England, didn’t provide an average rate on which to compare their request.

In a warning to consumers about the rates they’re likely to pay next year, Blue Cross President and CEO Peter Andruszkiewicz wrote that “for many, it may come as a surprise that their rates will rise significantly.”

Specifically, Blue Cross, the state’s largest insurer, is asking for a 14.7 percent increase in the average small-group-insurance rate for 2014. For individuals, the insurer wants an 18.1 percent hike.

Tufts, which doesn’t offer insurance to individuals, requested a 13.1 percent hike in its small group rates for next year. Neighborhood Health Plan didn’t offer insurance in these markets last year, so didn’t list an average change.

The requests are now being reviewed by Health Insurance Commissioner Christopher F. Koller. Based on past practice the insurers are likely to get smaller rate hikes than they want.

For all the insurers, the average rates don’t reflect what any particular customer will actually pay, as specific rates for each policy vary widely. Blue Cross said individual employers could see a 20 percent rate decrease up to a 40 percent increase.

But after the soaring health-insurance increases of the past decade appeared to have slowed in the last two years, the size of the requested rate hikes show the problem of rising medical costs is as serious as ever.

And the major provisions of the federal Affordable Care Act going into effect in 2014, intended to rein in medical costs, may not have the immediate impact many would like.

“We would like it to go quicker,” said Michael Hudson, chief financial officer of Blue Cross, about the push to reverse the growth of medical expenses. “We have been working with some key partners and care providers to reduce costs like all the stakeholders here, but overall costs continue to increase.”

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